Gucci generated circa €2.2 billion worldwide of revenue in 2008 according to BusinessWeek magazine and climbed to 41st position in the magazine's annual 2009 "Top Global 100 Brands" chart created by Interbrand.[2] Gucci is also the biggest-selling Italian brand in the world.[2] Gucci operates about 278 directly operated stores worldwide (at September 2009) and it wholesales its products through franchisees and upscale department stores.[3]

History

Gucci was founded in 1921 by Guccio Gucci. In 1938, Gucci expanded and a boutique was opened in Rome. Guccio was responsible for designing many of the company's products. In 1947, Gucci introduced the bamboo handle handbag, which is still a company mainstay. During the 1950s, Gucci also developed the trademark striped webbing, which was derived from the saddle girth, and the suedemoccasin with a metal horsebit.

His wife Aida Calvelli had a large family, though only the sons—Vasco, Aldo,Ugo, and Rodolfo—would play a role in leading the company. After Guccio's death in 1953, Aldo helped lead the company to a position of International prominence, opening the company’s first boutique in New York. Rodolfo initially tried to start an acting career as a matinee idol but soon returned to help direct the company. Even in Gucci’s fledgling years, the family was notorious for its ferocious infighting. Disputes regarding inheritances, stock holdings, and day-to-day operations of the stores often divided the family and led to alliances. Gucci expanded overseas, board meetings about the company’s future often ended with tempers flaring and luggage and purses flying. Gucci targeted the Far East for further expansion in the late 1960s, opening stores in Hong Kong and Tokyo. At that time, the company also developed its famous GG logo (Guccio Gucci's initials), the Flora silk scarf (worn prominently by HollywoodactressGrace Kelly), and the Jackie O shoulder bag, made famous by Jackie Kennedy, the wife of U.S. PresidentJohn F. Kennedy.

Gucci remained one of the premier luxury goods establishments in the world until the late 1970s, when a series of disastrous business decisions and family quarrels brought the company to the verge of bankruptcy. At the time, brothers Aldo and Rodolfo controlled equal 50% shares of the company, though Rodolfo contributed less to the company than Aldo and his sons did. In 1979, Aldo developed the Gucci Accessories Collection, or GAC, intended to bolster the sales for the Gucci Perfumes sector, which his sons controlled. GAC consisted of small accessories, such as cosmetic bags, lighters, and pens, which were priced at considerably lower points than the other items in the company’s accessories catalogue. Aldo relegated control of Perfumes to his son Roberto in an effort to weaken Rodolfo’s control of the overall operations of the company.

Though the Gucci Accessories Collection was well received, it proved to be the force that brought the Gucci dynasty crashing down. Within a few years, the Perfumes division began outselling the Accessories division. The newly-founded wholesaling business had brought the once-exclusive brand to over a thousand stores in the United States alone with the GAC line, deteriorating the brand’s standing with fashionable customers. "In the 1960s and 1970s," writes Vanity Fair editor Graydon Carter, "Gucci had been at the pinnacle of chic, thanks to icons such as Audrey Hepburn, Grace Kelly, and Jacqueline Onassis. But by the 1980s, Gucci had lost its appeal, becoming a tacky airport brand."

Soon, cheap knockoffs of Gucci wares had appeared on the market, further tarnishing the Gucci name. Meanwhile, infighting was taking its toll on the operations of the company back in Italy: Rodolfo and Aldo squabbled over the Perfumes division, of which Rodolfo controlled a meager 20% stake. Meanwhile, when Paolo Gucci, Aldo's son, proposed a cheaper version of the brand called 'Gucci Plus' in 1983 he fell out with the family. There was a boardroom quarrel that ended in a fistfight, and Paolo was reportedly knocked senseless by a telephone answering machine in the hand of one of his brothers. In return he reported his own father for tax evasion to the United States revenue, and Aldo was convicted and imprisoned on the testimony of his own son. By now, the outrageous headlines of gossip magazines generated as much publicity for Gucci as its designs.

Rodolfo’s death in 1983 caused a major shakeup in the company when he left his 50% stake in Gucci to his son, Maurizio Gucci. Maurizio allied with Aldo’s son Paolo to gain control of the Board of Directors and established the Gucci Licensing division in the Netherlands for this purpose. Following the decision, the rest of the family left the company and, for the first time in years, one man was at the helm of Gucci. Maurizio sought to bury the fighting that had torn the company and his family apart and turned to talent outside of the company for Gucci’s future.

Corporate

Gucci store at night

A turnaround of the company devised in the late 1980s made Gucci one of the world's most influential fashion houses[citation needed] and a highly profitable business operation[citation needed]. In October 1995 Gucci went public and had its first initial public offering on the AMEX and NYSE for $22 per share. November 1997 also proved to be a successful year as Gucci acquired a watch licensee, Severin-Montres, and renamed it Gucci Timepieces. The firm was named "European Company of the Year 1998" by the European Business Press Federation for its economic and financial performance, strategic vision as well as management quality. Gucci world offices and headquarters are in Florence, Paris, London, Hong Kong, Japan and New York. PPR headquarters are in Paris.

Canada

Brazil

Malaysia

Mexico

New management

A Gucci cap worn by Lindsay Lohan in 2002

Gucci clutch designed under creative directorship of Tom Ford

In 1989, Maurizio managed to persuade Dawn Mello, whose revival of New York's Bergdorf Goodman in the 1970s made her a star in the retail business, to join the newly formed Gucci Group as Executive Vice President and Creative Director Worldwide. At the helm of Gucci America was Domenico De Sole, a former lawyer who helped oversee Maurizio’s takeover of ten 1987 and 1989. The last addition to the creative team, which already included designers from Geoffrey Beene and Calvin Klein, was a young designer named Tom Ford.

Raised in Texas and New Mexico, he had been interested in fashion since his early teens but only decided to pursue a career as a designer after dropping out of Parsons School of Design in 1986 as an architecture major. Dawn Mello hired Ford in 1990 at the urging of his partner, writer and editor Richard Buckley.

In the early 1990s, Gucci underwent what is now recognized as the poorest time in the company's history. Maurizio riled distributors, Investcorp shareholders, and executives at Gucci America by drastically reining in on the sales of the Gucci Accessories Collection, which in the United States alone generated $110 million in revenue every year. The company’s new accessories failed to pick up the slack, and for the next three years the company experienced heavy losses and teetered on the edge of bankruptcy. Maurizio was a charming man who passionately loved his family's business, but after four years most of the company's senior managers agreed that he was incapable of running the company. His management had had an adverse effect on the desirability of the brand, product quality, and distribution control. He was forced to sell his shares in the company to Investcorp in August 1993. Dawn Mello returned to her job at Bergdorf Goodman less than a year after Maurizio’s departure, and the position of creative director went to Tom Ford, then just 32 years old. Ford had worked for years under the uninspiring direction of Maurizio and Mello and wanted to take the company’s image in a new direction. De Sole, who had been elevated to President and Chief Executive Officer of Gucci Group NV, realized that if Gucci was to become a profitable company, it would require a new image, and so he agreed to pursue Ford’s vision.

In early 1999 the luxury goods conglomerate LVMH, headed by Bernard Arnault, increased its shareholdings in Gucci with a view to a takeover. Domenico De Sole was incensed by the news and declined Arnault’s request for a spot on the board of directors, where he would have access to Gucci’s confidential earnings reports, strategy meetings, and design concepts. De Sole reacted by issuing new shares of stock in an effort to dilute the value of Arnault’s holdings. He also approached French holding company Pinault-Printemps-Redoute (PPR) about the possibility of forming a strategic alliance. Francois Pinault, the company’s founder, agreed to the idea and purchased 37 million shares in the company, or a 40% stake. Arnault’s share was diluted to a paltry 20%, and a legal battle ensued to challenge the legitimacy of the new Gucci-PPR partnership, with the law firm of Skadden, Arps, Slate, Meagher & Flom representing Gucci. Courts in the Netherlands ultimately upheld the PPR deal, as it did not violate that country's business laws. The second largest shareholder is Crédit Lyonnais with 11%. As of September 2001 a settlement agreement was put into place between Gucci Group, LVMH, and PPR.

Following Ford's departure, Gucci Group retained three designers to continue the success of the company's flagship label: John Ray, Alessandra Facchinetti and Frida Giannini,[4] all of whom had worked under Ford's creative direction. Facchinetti was elevated to Creative Director of Womenswear in 2004 and designed for two seasons before leaving the company. Ray served as Creative Director of Menswear for three years. 32-year-old Giannini, who had been responsible for designing men's and women's accessories, currently serves as Creative Director for the entire brand.

Automobile culture

The interior of the AMC Hornet Sportabout with the Gucci package

American Motors Corporation

Aldo Gucci expanded into new markets including an agreement with American Motors Corporation (AMC). The 1972 and 1973 AMC Hornet compact "Sportabout" station wagon became one of the first American cars to offer a special luxury trim package created by a famous fashion designer. The Gucci cars sported boldly striped green, red, and buff upholstery and on the door panels, as well as the designer's emblems and exterior color selections. American Motors also offered a Pierre Cardin Edition of its Javelin automobile.

General Motors

In 1979 and 1980, a Miami-based aftermarket company offered the Cadillac Seville by Gucci edition. The exterior included a "facing double G" Gucci logo as a hood ornament and the c-pillar covered vinyl roof. The interior had a headliner of the logo and headrests adorned with the logo as well. The dashboard carried the "Gucci script" logo in bold lettering. Inside the trunk was a full set of Gucci luggage.

Ford Motor Company

A 1989 Gucci Series Lincoln Town Car was scheduled to be offered, per pricing guides, but never came to fruition. Lincoln offered Emilio Pucci, Bill Blass, Gianni Versace, Hubert de Givenchy, and Valentino designer editions during the 1970s and 1980s.

Partnerships

Gucci has had a partnership with UNICEF since 2005.[5] Gucci stores world-wide donate a percentage of the sales for special collections made specifically for UNICEF to go toward the United Nations Children's Fund. The annual Gucci Campaign to Benefit UNICEF supports education, healthcare, protection and clean water programs for orphans and children affected by HIV/AIDS in sub-Saharan Africa. For the campaign in 2009, Michael Roberts promoted a children's book, "Snowman in Africa" with proceeds going to UNICEF. In five years, Gucci donated over $7 million to UNICEF. Gucci is the largest corporate donor to UNICEF's "Schools for Africa" that was established in 2004 by UNICEF, the Nelson Mandela Foundation, and the Hamburg Society. Its goal is to increase access to basic schooling for all, with a special emphasis on children orphaned by HIV/AIDS and children living in extreme poverty.

Record

Guinness World Records cites the Gucci "Genius Jeans" as the most expensive jeans in the world. A pair of Gucci jeans that had been distressed, ripped and covered with African beads, when they debuted in October 1998 in Milan, were priced at US$3,134.CD[6]